Following the news around the possible Tesco and Booker merger and that the Competition and Markets Authority (CMA) will assess whether the deal could reduce competition and choice for shoppers and other customers. Its clear that we as consumers now face the situation where main grocery shop, convenience or top up shopping and now eating out of home with your family, could be controlled by a significant player.
Given the dog fight that is going on in the grocery market, difficulty in growing their like for likes, and continued loss of their core shopper to a highly efficient discounter model, it is no surprise that this merger remains a good option for Tesco and a true shot in the arm for Booker.
So what about suppliers?
However what remains the ‘Elephant in the room’ and frankly where true value for consumers is created, is the effect this will have on both branded and own label suppliers to both parties. Without doubt where suppliers are trading with one party but not currently trading with both, this could be the opportunity to open up the door to both another channel and new set of consumers! However, for those trading with both …. well it’s clear ….. you are the ones who will be supporting the £130m savings that Tesco and Booker have identified!
As a colleague once said …you can wither plan fro this or budget for it….. i suggest we start to plan!
Time to plan
The toothless Grocery code of practice (GSCoP) has done little to truly help support manufacturers when dealing with retailers and now facing real food inflation and double digit raw material costs since the pound was hit by Brexit fever!
The realities of dealing with these powerful retailers is simply where we need to invest in a better approach and skills for our people. A partner that without doubt is able to create significant trauma to you as a supplier and continues to try to extract monies, requires a response and business with people that have the best skills and a know how from both sides of the fence, and take your share of any value that is on offer!
Call to Action
Before the CMA push this through on their first phase decision on the July 25th, isn’t it now time to plan and prepare, before you pay your share of their savings!
At SmithCarey and in partnership with Focal point negotiations, we help you prepare plan and deliver merger discussions, set out the strategy and get support to up skill and deliver the plan from ‘both side of the fence’ (manufacturer and retailer perspective). We will bring true experts to help deliver the process, plan,process and strategy, whilst developing the skills and behaviours that will prepare for the onslaught of new demands coming your way!
So lets talk about your plan and work together to make sure you truly benefit from the proposed Tesco Booker merger !